Customer Feedback is the Oxygen of Social Enterprise

In the context of this article I am using the term “Customer Feedback” to include content from company sponsored Voice of Customer programs and content from unsolicited Word of Mouth published by customers online.

Social, Outside-In, Customer Centric companies “treat feedback like oxygen, something the business needs every day to survive. They constantly listen and constantly act on the voice of the customer, and make sure the customer sees this happen too.” This quote came from Rod Butcher’ great article Surviving and thriving in the brave new world of customer experience.

In a traditional Inside-Out company, Customer Feedback programs are often deemed ineffective because people prefer to hear what they want to hear, instead of what they need to hear. It is easy to dismiss opinions, mined from customer feedback, that do not agree with our own as “anecdotal” and/or statistically non-representative. However, those customer opinions may be the most valuable early warning signals that can alert savvy marketers of an upcoming crisis, like the proverbial canary in a coal mine, or precious hints pointing to opportunities for dramatic performance improvement.

The use of Social Media as another channel for Customer Support only does not make a company customer-centric. That requires consistent, continuous actions improving all company processes based on empathy with customer experience. One needs an intimate understanding of that experience to be able to develop genuine empathy. Mining customer feedback provides the most easily accessible path toward that understanding. The development of a culture that supports the authentic desire of employees to understand, empathize and see what they do from a customer perspective (Outside-In) makes a company a Social Enterprise.

Here are few examples:

A few years ago customer complaints about a device overheating were dismissed by the manufacturer’s management until many other customers joined in to create a social avalanche that caused public embarrassment and loss of market share, i.e. serious brand value erosion. Today, the very first customer complaint is investigated to understand the true cause and a patch or workaround is developed. Instead of hiding the problem, it is immediately communicated to the rest of the customers along with the patch/workaround distribution. The supply change participants are notified of the problem with suggestions for possible solutions to be implemented to eliminate the problem. If the problem is not eliminated within an agreed time, the relationship with the supplier is severed.

A company that allows products to be designed by engineers without marketing leadership ends up with really “cool” products that don’t sell very well. Savvy marketers use social media as a fast and efficient alternative to ethnographic research for learning specifics of customer experience. Even when marketing has little influence on the engineering process, an understanding of customer experience helps to position a product or service for the appropriate market segment and to communicate its value in a language that resonates with its best potential customers.

A major retailer with an excellent customer service reputation because of its “no questions asked” return policy started to use online customer reviews of products to optimize their inventory. Buyers negotiate marketing allowances with vendors today based on the social reputation of their products. That caused a reduction in a number of SKU they sell, but it also dramatically reduced their rates of returns, i.e. time and processing cost. Most importantly, the retailer’s reputation improved by 23%. Shoppers cite better sales advice from the floor personnel. Sales associates, who cover fewer products and understand customer experience with these products, are able to meet shopper needs with the most appropriate offers.